higher education loans

A Higher Education Loan Guarantee Authority (HELGA) will be set up by the Government of India (GOI), to help needy students get an education loan without hassles and also pay the interest incurred on such education loans during the 'moratorium period'.
Earlier, Ministry of Human Resource Development had started a scheme which provided education loans at a subsidized interest rate of 4 percent to students belonging to poor sections of the society. The shortfall in talent pool, which is required to support the booming economy has been timely recognized by the Government and it does not want finances to be a hurdle in higher education.
The Authority will provide loans for technical and professional courses at both the undergraduate and post-graduate levels. The courses should be recognized by Medical Council of India, University Grant Commission (UGC) and All India Council for Technical Education (AICTE). This education loan authority will presently support one loan per student.
One of the major hurdles faced by poor students is the collateral and co-applicant requirements by the banks for providing education loans in India. For an education loan of less than Rs. 4 lakh banks generally waive the collateral requirements, but if the loan amount is higher they ask for fixed deposits, LIC policies, properties etc. as the collateral. In most cases banks will also ask for a co-applicant, which will be the guarantor of the loan since most applicants have yet to start earning and hence their repayment capacity is still unclear.
Government of India and various dignitaries have asked the banks to waive these requirements and make education loan accessible to the poorer sections of the society. A member of planning commission said, "Depending on their requirement, they will get loans up to Rs 1.5 million from banks. We are also planning that students should not pay huge collaterals, as is the norm now, to avail loan from banks